The Way to Find a Manufacturer or Supplier for Your Product Idea
A manufacturer is a person or any business that makes finished goods from raw materials which can be sold to consumers, wholesalers, distributors, retailers, and other manufacturers wanting to create more complex items.
Updated: May 31, 2024
Although you may have brainstormed some ideas of your own, like capitalizing on one of the many in-demand products already on the market while thinking about starting an online store, you still may have questions regarding finding a manufacturer or supplier for your product idea.
How do I know if a manufacturer is legal or valid? or Is it better to work with manufacturers near me, or abroad? are types of question that may comes to your mind. It is not always easy to find good products whether you plan on manufacturing something of your own or finding suppliers to purchase from wholesale.
You must have some ideas for some places to search, and examine how you should approach suppliers and what to ask them when developing a product for your ecommerce business.
Manufacturer/ Supplier:
- A manufacturer is a person or any business that makes finished goods from raw materials which can be sold to consumers, wholesalers, distributors, retailers, and other manufacturers wanting to create more complex items.
- Generally, Manufacturers stick to one type of product where as Retailers work with multiple manufacturers at the same time to create an inventory for their store.
- Suppliers, are referred to anyone who has the capability to provide products and inventory for you which encompasses manufacturers, wholesalers, and distributors.
- Helpful resources those are available online can be found through Google.
- There are a few things you need to know and decide before you find these resources. These include deciding the type of supplier you are looking for as this will help determine the terminology you need to use in your research.
- Suppliers can be either a manufacturer who produce your own product idea; a wholesaler, or distributor who purchases already existing brands and products or a dropshipping company which supplies products and fulfills orders of already existing brands and products.
- 3D printing, Repetitive manufacturing, Discrete manufacturing, Job shop manufacturing, Continuous process and Batch process are different types of manufacturing.
Domestic vs. Overseas Suppliers:
You will need to decide whether you want to source domestically or from overseas when looking for suppliers if you plan to manufacture or wholesale.
Overseas can be any location abroad.
It is always a good idea to work with both domestic and overseas manufacturers where your local manufacturer can be used as a backup.
You can fall back on your local supplier if orders from overseas are late or incorrect.
Although the local supplier are more expensive, but it is better to keep products stocked and customers happy than waiting for overseas shipments.
Usually it is much cheaper to source your products overseas, especially in Asian countries, like India, China and Taiwan because of lower labor costs.
However, you need to decide more things rather than looking for just the upfront investment and cost per unit.
Advantages of Domestic Sourcing:
- Manufacturing and labor standards are of high quality.
- Communication is easier with no language barrier.
- Verification of reputable manufacturers is easier.
- Shipping time is faster.
- Intellectual property right protection is high.
- Payment security and recourse is greater.
- Marketing appeal of made in North America.
Disadvantages of Domestic Sourcing:
- Manufacturing cost is higher.
- You will have less product choice as there are many items that just are not made in North America anymore.
Advantages of Overseas Sourcing:
- Manufacturing cost is lower.
- You will have more option of manufacturers to choose from.
- It is easy to navigate suppliers with one-stop services like Alibaba.
Disadvantages of Overseas Sourcing:
- Lower recognized quality from customers.
- Manufacturing and labor standards are usually lower.
- Intellectual property protection is low.
- It can be difficult to navigate with language, communication, and time-zone barriers.
- Verification of manufacturer and visit on-site is difficult as well as costly.
- Shipping time is longer.
- Cultural differences can be found in business practices.
- Payment security and recourse is less and Product importation and customs clearance.
It is always a good idea to hire a manufacturing manager when working with overseas manufacturers and suppliers who will handle negotiations, orders, and manage your partners.
They acts as the central hub for your overseas supply chain as they can be the in between for your business and manufacturing companies.
The manager will work directly with the manufacturer to solve it if any issue arises.
Communication can be improved and production can be made smooth for your business as these managers can speak the local language.
Process of Manufacturing a Product:
You can find the best manufacturers and suppliers for your business by following the below steps:
Research:
Finding the right manufacturer for your new product is essential for your success as the cost, quality, and packaging and shipping of your product is controlled by Manufacturers.
Getatoz:
Getatoz can be used to connect with manufacturers to create custom products.
Getatoz is a common marketplace to find existing products that connects you with manufacturers globally.
You can simply search for the products that you are looking for and browse through the various suppliers and manufacturers using Getatoz.
You should look for Premium supplier, which means they pay for their Getatoz membership when researching manufacturers on Getatoz.
Make sure your manufacturer is not a trading company when sourcing from Getatoz as a trading company is a middleman and won't be able to produce your products.
Directories:
Free online supplier directories are another place to research manufacturers which act as manufacturer catalogs that contain profiles for hundreds or thousands of manufacturers, wholesalers, and suppliers.
ThomasNet, Maker's Row, MFG, Kompass and Council of Manufacturing Associations Member Organizations are some of the popular online domestic directories.
AliExpress, Indiamart, Getatoz and Sourcify are some of the popular online overseas directories
Google:
A variety of search terms such as words like wholesale, wholesaler, and distributor may be used interchangeably, to search for all of them.
Page two of Google search results and beyond can be explored to find suppliers on Google as many suppliers have not kept pace with the internet or Google's algorithm changes as a result their websites are usually old, sparse on information, and have poor search engine optimization..
Google's search shortcuts can be used to improve the quality of your searches and your results
Referrals:
Make sure to use the channels like social networks as they have made it much easier to get the word out.
You may ask connections in your professional networks if they have any recommendations or if they know someone who might as some of the best leads can come from referrals.
NAICS codes:
Products can be searched by their NAICS code as every single manufacturing industry and product you can think of is attached to a NAICS code.
NAICS is the North American Industry Classification System.
Manufacturers and suppliers are easier to find when you are using professional directories as manufacturers and suppliers list products by their NAICS code.
The NAICS directory can be found online or at your local library.
The Better Business Bureau (BBB) can be checked to see if there have been any complaints filed.
You can also browse the Facebook page reviews of the manufacturer and use those Google search tricks to query the company name and reviews to see if any red flags come up.
Outreach and Collection Information:
You will need quotes once you find manufacturers.
You should aim to get a minimum of three quotes to compare options.
Before sending a quote requests you should know if they accommodate custom orders, their leads times, shipping costs , their minimum order quantities (MOQs), cost per unit, whether they can grant you exclusivity, their defect policy.
You may also need to know whether the manufacturer sustainable and ethical as well as the setup fees if any.
Shipping costs of a manufacturer can be learned to determine how it will affect your bottom line.
You also need to negotiate cost per unit while you are negotiating MOQs. Your cost per unit can be lower if the order is large.
Make sure they aren't allowing others to use the tool that you are buying for them to manufacture your product.
Territorial, market, or total exclusivity can also be asked.
Private label goods are also offered by some service providers.
Sometimes a fee will be charged by manufacturers to get equipment ready to produce your goods.
Negotiating Minimum Order Quantities:
Minimum order quantities (MOQs) make it difficult or you when you have limited funds or want to start small business and test the market before making larger purchases.
However, almost all MOQs are always negotiable.
You need to understand why the supplier has imposed a minimum before you negotiate as understanding the reasons behind the minimum quantity can help you better understand their position and you can negotiate and propose the best counter offer.
Discussing Payment Terms:
It is important to know if the suppliers will require you to pay for the full order upfront as inventory is a major cost for ecommerce businesses.
A lack of supplier responsiveness is not unusual new ecommerce entrepreneurs.
So, you should avoid long emails, asking for too much or too many quotes as well as asking for too little when you reach out to suppliers for the first time.
You can make a quick call or send a one-question email prior to ask what their minimum order is if you are unsure whether your request is too small.
A good manufacturing supplier will be always open to negotiating payment terms and they usually won't ask for 100 percent upfront before shipping.
You can work out a deal with them by asking for 50 percent upfront, 50 percent after shipment is received which holds both parties responsible for the order and doesn’t leave too much risk on either side.
Communicating with Manufacturers and Suppliers:
You can communicate with suppliers by using either Skype calls, Email or WeChat.
Always look for companies that are responsive and eager to work together and avoid those who are late to response.
Communicate Your Designs:
You can ask the manufacturer if they can create your design once you spoke with a potential manufacturer.
Some manufacturers will have a product development process with prototyping and 3D modeling.
You can also communicate your ideas with them through Sketches, Instructions and Reference photos as an alternative to product development process as these can be expensive.
You can use Fiverr or Upwork to find freelancers to create drawings for you if they don't do design.
Industrial designers, Product designers or CAD experts can be hired.
You can also find a local designer and work with them to develop prototypes and custom molds which is more affordable than going through a manufacturer.
Order Samples:
You should get samples to test before going into productions and before placing a full order.
Date and sign the sample once the sample is right.
Keep one or two samples for yourself as these can be your control samples and are any type of forensic sample used to assure quality and get consistent consumer products.
Negotiate:
It is still possible to negotiate terms such as payment or MOQ between the time you get a sample and when you place your order.
The only way to build a long term, healthy relationship is to work together so both parties profit and are happy.
Place Your Order:
Place your order after doing a 100 percent quality control check first.
Make sure every product they have sent you meets your standards by checking those product.
Send your order and get the production process started if you are satisfied with everything.
Finding Your Supply Partners:
Sourcing suppliers and manufacturers is one of the costs of starting a business which is a unique process.
It is a critical decision for your new business to locate good suppliers as they aren't always easy to find.
A little more patience and perseverance is required to find the perfect partner for your new venture.